Updated from 4:10 p.m. EDT

Stocks edged to the downside Friday as the traders who hadn't already left town digested the rousing rally sparked yesterday by the

Federal Reserve's

latest economic pronouncement.

The

Dow Jones Industrial Average

gave back 40.58 points, or 0.36%, to 11,150.22, and the

S&P 500

slipped 2.68 points, or 0.21%, to 1270.19. The

Nasdaq Composite

shed 2.29 points, or 0.11%, to 2172.09.

The big corporate story of the day centered on one of the Dow 30,

General Motors

(GM) - Get Report

. Shares of the world's biggest automaker finished 8.6% higher after Kirk Kerkorian sent a letter to the company recommending a global partnership with Nissan and Renault.

According to Kerkorian, who owns 10% of GM, Renault-Nissan is receptive to a partnership and might consider buying a minority stake in the company. The stock rose $2.35 to close at $29.79.

Elsewhere on the Dow,

Procter & Gamble

(PG) - Get Report

and

Home Depot

(HD) - Get Report

fell 2.4% and 1.8%, respectively.

The Nasdaq faced pressure from

Apple Computer

(AAPL) - Get Report

, which acknowledged that some irregularities were found in employee stock options; this could force changes to its past financial statements. Apple lost $1.70, or 2.9%, to $57.27.

"We had a great week thanks to yesterday's gain," said Art Hogan, chief market analyst with Jefferies. "The fact that we held on to gains from yesterday is a positive sign to help us into next week."

Aside from the Fed, GM and Apple, trading was influenced by the fact that Friday was the last day of the second quarter and that next week will be shortened by the Independence Day holiday in the U.S. Markets close at 1 p.m. EDT Monday and are shut Tuesday.

Volume was strong ahead of the weekend. About 1.91 billion shares changed hands on the

New York Stock Exchange

, with advancers beating decliners 2 to 1. About 2.56 billion shares changed hands on the Nasdaq, and winners had a 3-2 edge over losers.

Meanwhile, the 10-year Treasury was up 14/32 in price to yield 5.14%, while the yield on the two-year Treasury note is at 5.15%, indicating an inverted yield curve. The dollar fell against the yen and euro.

Before the opening bell, the Commerce Department said that both personal income and spending rose 0.4% in May, beating forecasts. The core-PCE deflator -- a key measure of inflation -- rose 0.2%, which was in line with expectations.

To view Gregg Greenberg's video take on today's market, click here

.

Also on the economic front, the University of Michigan revised its consumer sentiment reading to 84.9 for June, slightly higher than expectations. In addition, the latest reading on the Chicago Purchasing Managers' Index came in at 56.5, below economists' consensus target of 59.0.

U.S. stocks surged on Thursday as traders sensed a dovish subtext in the statement accompanying the Fed's 17th consecutive quarter-point rate hike. While boosting fed funds to 5.25%, its highest level since early 2001, policymakers noted that "economic growth is moderating," a statement markets interpreted as lowering the odds of another hike when the Fed next meets in August.

Fed members said "some inflation risks remain" in the economy. "The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the FOMC statement said.

The absence of firmer anti-inflation language was enough to spark a rally on Wall Street. The Dow rose 217 points, or 28%, to 11,190.80, its best single-session point gain since March 2003. The S&P 500 gained 27 points, or 2.2%, and the Nasdaq surged 63 points, or 3%.

Despite the negative close Friday, the Dow rose 161 points, or 1.46%, for the week. The S&P 500 gained 25.5 points, or 2%, and the Nasdaq is higher by 50.5 points, or 2.38%. However, the Dow finished 18 points lower for the month, and the Nasdaq fell 6 points. The S&P 500 was only fractionally higher for June.

For the first half of the year, the Dow gained 4.3%, and the S&P 500 is up about 1.8%. The Nasdaq is lower by around 1.5%.

Thursday's gains came even as oil prices jumped nearly 2% on Nymex, closing at $73.55 a barrel as traders went long ahead of a major week for U.S. travel. On Friday, August crude added 41 cents to $73.93, a gain of over 4% for the week. In the metals market, gold rose $27.10 to close at $616 an ounce, its first close above the $600 level since June 12. Silver was higher by 50 cents to $10.83 an ounce, and copper rose 4 cents to $3.46 a pound.

The surge in gold prices helped the Amex Gold Bugs index rise 2.6%. In other sectors, the Dow Jones Transportation Average added 0.7%, and the Amex Oil index tacked on 0.2%. Elsewhere, the Philadelphia Semiconductor Sector index gave up 1%, the Philadelphia Housing Sector index was off 0.9%, and the S&P Retail index finished down 0.8%.

Computer Sciences

(CSC)

tumbled 13.1% after the company said the

Securities and Exchange Commission

made an informal request for information related to its own stock option grants and stock option practices. Computer Sciences was down $7.32 to close at $48.56.

Shares of

EMC

(EMC)

fell 2.5% after the data storage company said it has agreed to purchase

RSA Security

(RSAS)

for $2.1 billion in cash. RSA surged 18.4% to $27.10.

A handful of big tech companies reported earnings after the bell Thursday.

Research In Motion

(RIMM)

said first-quarter earnings fell 2% from a year ago but still beat estimates on a 35% rise in revenue. The company reported 680,000 BlackBerry subscriber additions in the quarter, about 5,000 more than it had predicted. RIM added $3.78, or 5.7%, to finish at $69.77.

Palm

(PALM)

earned $27.2 million, or 25 cents a share, in its fourth quarter, 53% from a year ago. Adjusted earnings were well ahead of estimates. Still, the stock declined as the device maker's first-quarter profit guidance trailed Street forecasts. Palm dropped $2.56, or 13.7%, to $16.10.

Overseas markets were higher, with London's FTSE 100 up 0.7% to 5833 and Germany's Xetra DAX gaining 1.8% to 5683. In Asia, Japan's Nikkei rose 2.5% overnight to 15,505. Hong Kong's Hang Seng also added 2.5%, to 16,268.